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The Blues beat off competition from a host of European rivals to sign the 18-year-old from Sao Paulo, when he completed a move to Stamford Bridge last January.

Piazon has made three appearances for the club so far - two in the Capital One Cup and one Premier League outing in the 8-0 victory over Aston Villa in December 2011.

However, with first-team opportunities likely to be limited due to the stiff competition for places in the youngster’s position, with Eden Hazard, Juan Mata and Oscar all currently ahead of him, he will join the Spanish outfit.

Malaga currently sit in fifth spot in La Liga and will face Portuguese giants Porto in the last 16 of the Champions League in February.

Piazon has represented Brazil at Under-15s and Under-17s levels and will be hoping to establish himself in Spain under Malaga boss Manuel Pellegrini.